80 Pine Street..072513 (Rick Kopstein)
After a dip in its bottom line in 2015, Cahill Gordon & Reindel rebounded financially last year thanks to strong performances from its corporate and litigation groups.
William Hartnett, chairman of Cahill Gordon’s executive committee, said that in 2016 demand for the firm’s services was strong, attributing growth, in part, to a better realization rate.
“Corporate was incredibly slow for the first quarter and had a terrific rebound for the last nine months,” Hartnett said. “Litigation was steadily strong throughout the 12-month period, so I think we just see that as good momentum for us going into 2017.”
The firm’s gross revenue grew 4.9 percent in 2016, to $382.5 million, compared to $364.5 million the year prior. Profits per partner were up 8.2 percent, to nearly $3.64 million, while revenue per lawyer climbed 10.3 percent, to $1.29 million.
Total head count at Cahill Gordon slipped slightly, as the firm’s lawyer ranks dropped from 312 in 2015, to 296 in 2016. But the firm saw the size of its equity partnership increase slightly, from 62 to 64. Cahill Gordon’s finances traditionally float with the capital markets.
“We are probably more dependent than most firms in activity in the capital markets [and] bank lending market,” Hartnett said. “Fortunately, it’s a very resilient market.”
Hartnett estimated that his firm had a 35 percent market share as legal advisers to underwriters in U.S. high-yield bond offerings and 15 percent in European high-yield bond offerings in transactions that totaled nearly $74 billion. Cahill Gordon also had a 31 percent market share of leveraged lending activities in the U.S. in deals worth about $200 billion.
“From our point of view, we’ve been in a very large and active market,” Hartnett said. “We have developed a dominate market share position that has served us well throughout many years and last year was no exception.”
In 2016, Cahill Gordon represented the financiers behind Dell Inc.’s $67 billion acquisition of EMC Corp., Western Digital Corp.’s $18.1 billion purchase of SanDisk Corp., Symantec Corp.’s $4.65 billion buy of Blue Coast Systems Inc. and IMS Health Holdings Inc.’s $9 billion all-stock merger with Quintiles Transnational Holdings Inc.
Cahill Gordon also represented financiers on several acquisitions by private equity firm Apollo Global Management LLC, including its $2.2 billion deal to buy Diamond Resorts International Inc. and $1.6 billion acquisition of Outerwall Inc., owner of rental kiosks Redbox and Coinstar.
In addition to the firm’s capital markets work, Cahill Gordon represented The Empire District Electric Co. in its $2.4 billion sale to Algonquin Power, Bluewolf Group LLC in its sale by IBM Corp. and ICON plc in its acquisition of Clinical Research Management Inc.
“When you consider that the results almost reflect only nine months as opposed to 12 months, it was a very, very good year in corporate and obviously that’s continuing through the first quarter of 2017,” Hartnett said.
Cahill Gordon, which last month lost white-collar litigation partner David Kelley to Dechert in New York, did not make any lateral partner hires of its own in 2016. But Hartnett said that Richard Kelly, hired by the firm in 2015 from Shearman & Sterling’s London office, did help Cahill Gordon expand its operations in the city, particularly with respect to regulatory, investigations and litigation work.
Looking ahead into 2017, Hartnett said that Cahill Gordon will continue to look for ways to expand and increase its market share, which means that lateral hires might be on the horizon for the 98-year old firm.
“We are more willing at this stage of our history to go into the market for laterals,” Hartnett said. “It’s opportunistic, it’s been strategic and its worked out very well for us.”